Abstract Counterfactual learning refers to the ability to adapt our behavior in response to observations or inferences abouttheoutcomesofchoicesthatwedidnotmake.Byallowingustoconsidermanypossibleactionsand theiroutcomes,evenintheabsenceofdirectexperience,counterfactualthinkingsupportsnumerousessential cognitivefunctions.Importantly,deficitsincounterfactualthinkinghavebeenidentifiedinmanypsychiatricand neurological diseases including depression, drug abuse and schizophrenia. We know little about the neural circuitry underlying this type of learning, however. Although previous work has implicated the orbitofrontal cortex (OFC) in the ability to learn from counterfactual information, we lack a detailed understanding of its causal role in counterfactual learning. Additionally, we do not understand how OFC neurons interact with downstream structures to support this behavior. To dissect the neural circuit mechanisms of counterfactual learning,weproposetodevelopanovelcounterfactuallearningparadigmformiceusingvirtualreality.Wewill thenuseoptogeneticinactivationtodeterminethedynamicsofOFC?scausalroleincounterfactuallearning. Wewillalsoinvestigatehowthisregioninteractswithdownstreamareastoencodecounterfactualinformation, performingtwophoton,cellularresolutioncalciumimagingfrompopulationsofOFCneuronsidentifiedbytheir projectiontarget. We will then optogenetically stimulate these projectionspecific populations to test their involvementincounterfactuallearning.Bycombiningnovelmousebehavioralparadigms,targetedinactivation and activation ofneuralactivityandlargescalesingleneuroncalciumimaging,thisproposalaimstorevealthe neuralcircuitmechanismsofcounterfactuallearning.Identifyingandcharacterizingneuralcircuitsthatunderlie thisimportantcognitivefunctionisnotonlyvitalforunderstandinghowwelearnintherealworld,butmaybe important for understanding the impaired counterfactual information processing that is a marker of several prevalentpsychiatricdiseases.